Chegg jumps after announcing job cuts as part of restructuring plan
18/06/2024 09:44
** Shares of ed-tech company Chegg CHGG.N rise ~19% at
$3.11 premarket
** Co on Monday announced job cuts as part of restructuring
plan, which is expected to result in non-GAAP expense savings of
$40 mln-$50 mln in 2025
** Jefferies notes CEO Nathan Schultz commitment to
delivering higher profitability, but believes the business
remains under duress from AI
** "While new initiatives seem promising, we will wait till
we see proof points of the strategy working out" - Jefferies
** Raymond James says co's restructuring plan will result in
significant cost reductions and should give investors
incremental comfort in FCF projections
** Believes shares remain inexpensive, although investors
would like to see top-line stability before supporting
materially higher valuation
** Up to Monday's close, CHGG down ~77% YTD
(Reporting by Roshan Abraham)
((Roshan.Abraham@thomsonreuters.com))